FOREWORDFrom the
FOREWORDFrom the editor’s desk.NEWS FROM ALL AROUND AFRICARecent investments, expansions and milestones.PACCIThe Pan African Chamber of Commerce and Industry (PACCI) isthe continent’s foremost business chamber body.ESG DISCLOSURE DEMANDS ON THE INCREASE IN AFRICARisks to infrastructure from climate change are among the more detailed reportingrequirements that African businesses now face, writes Philippa Burmeister.AFRICA NEEDS TO PRESENT A UNITED FRONT AT COPTina Costa and Gregory Nott, directors at Norton Rose Fulbright South Africa, callfor a “winner’s mindset” from the continent’s leaders at annual COP gatherings.CULTIVATING RESILIENCEAgriculture’s role in climate-change mitigation: adaptation of a speech given by DrAndrea Campher, Senior Manager Sustainability and Agribusiness at Standard Bank.COULD WATER WHEELING SOLVE AFRICA’S WATER CRISIS?Adapting the concept of wheeling for water distribution could bring flexible and efficientwater management to dry regions, according to Helgaard Muller, Director at Cresco.HOW 5G IS DRIVING INFRASTRUCTURE INVESTMENTBy Rami Osman, Director for Business Development, MediaTek Middle East and Africa.BORING BUSINESSES ARE GOOD BUSINESSBakeries and laundries might be “boring”, but their recordscan attract capital, says Ryan Cohen, co-founder and ChiefRelationship Officer, Merchant Capital, in an interview.TAKING ACTION THROUGH LEARNERSHIPSDaniel Orelowitz, Managing Director at TrainingForce, believes that youth unemployment can be addressed.AFRICA CAN LEVERAGE THE SHIFT TO AN ELECTRIC ECONOMYMining companies may need to scale down to withstandcurrent strains, argues Igor Hulak, a Partner at Kearney, butthere are also huge opportunities in critical minerals.COUNTRY PROFILESMadagascar and Mozambique.6810162024262932343840ContentsContentsThe Journal ofThe Journal ofAfrican BusinessAfrican BusinessAA Silver Tsunami is on the way, says Ryan Cohen, co-founder and Chief Relationship Officer, Merchant Capital, and Africa’syoung entrepreneurs have opportunities to take over established businesses. Bakeries and laundries might be “boring”,but they can attract capital based on their record.BORING BUSINESSES ARE GOOD BUSINESSAn interesting trend in business ownership that has been identified in the UnitedStates could be relevant to the local markets. And Merchant Capital, which offersfunding to small and medium enterprises, has spotted the trend and is acting on it.In the course of a Zoom conversation with The Journal of African Business,Ryan Cohen, co-founder and Chief Relationship Officer, Merchant Capital,referenced a “Silver Tsunami”, a concept which he says caused the penny to“properly” drop for him as a provider of business finance. His research uncoveredthe fact that millions of US business owners are coming up for retirement:2.3-million business owners over the age of 60 who are responsible for employingabout 25-million people.A second trend which Ryan has identified is also relevant here: the importance of“boring” businesses. By boring, he means businesses that supply the basic productsand services that communities need.“These guys are actually the backbone to the economy, the businesses thatprovide essential goods and services,” he notes. “More often than not their businessmodels are uncomplicated, they’re tried and tested. In your neighbourhood, whatdo you have? You’ve got a pharmacy, you’ve got a pet store, you’ve got a hardwarestore, you’ve got a fuel station — now these businesses aren’t cutting edge butthey’re essential and often they are very successful.”Boring businesses tend to be in the same place for a long time; they becomea fixture in the community. “For the incumbent it is a real opportunity and for theguy who is looking for the next opportunity it is slightly more difficult,” notes Ryan.However, if these boring businesses, which have been providing essential servicesfor many years start becoming available to a new generation of entrepreneurs asthe Silver Tsunami grows then, “There is a huge opportunity of boring businessesthat are available for young, ambitious people to buy into or to take over and givingthemselves an opportunity to become entrepreneurs.”Financing factorsTime in business is an important input regarding business finance. These businessesare often highly profitable and because they have been managed by seasonedprofessionals they have stable foundations with established operations, making iteasier to forecast future performance. Cohen mentioned that on average buying anexisting business can cost up to 40% less than starting one. With a trading history,it is far easier for established businesses to apply for the working capital or fundingthey need to grow the business.Ryan says, “We refer to our value proposition as asset-free, so it is unsecured.The process is very quick, simple and easy. These business owners are often timepoorand may not have the ability to put together long complicated documents.Process approval and funding time happens in less than 48 hours. One of the otherkey benefits is that repayment fluctuates in line with businesses’ turnover. That isthe combination of the unique selling propositions of this offering.”Managing Merchant Capital’s risk profile is based on the company’s“really strong credit know-how and understanding that relate to SMEbusinesses”. That experience goes back to 2012 and includes deploying aboutR10-billion to close to 50 000 businesses. The funder’s deal size range isbetween R250 000 and R5-million.The grey dividendThe other side of the Silver Tsunami is that grey hair can sometimes be a goodthing in an entrepreneur. Someone who has worked in a bakery for decadesis likely to have a good understanding of what it takes to run a bakery.Notes Ryan, “I am generalising here, but people who are 40 and up, based on theexperience that they have and the fact that they are bumping their heads less, thechance for success is certainly greater.”The old adage about not being able to buy experience applies. Ryan adds,“You need to have seen a movie in order to make a better decision the next timeRyan Cohen, co-founder and Chief Relationship Officer, Merchant Capital.it presents itself. It can be countered in younger business owners when there isa strong mentorship and let’s call it grey hair or access to grey hair. In someinstances, that’s not available so the propensity for success may be less. But witholder business owners in many respects, they are the grey hair.”Boring benefitsGiven that Merchant Capital’s model is partly based on turnover, it’s easy tosee how the concept of “boring” businesses has traction. Remarks Ryan, “Thekey benefit to a boring business is the fact that there’s stability and there ispredictability from a customer perspective and customers translate into revenue.You have a predictable revenue stream going through the till on a monthly basis.There is often lower completion in a particular area and that means higher andmore consistent margins.These businesses are also resilient. A practical example of being stress tested wasduring Covid. A lot of these boring businesses were deemed essential and were ableto navigate and trade through this period, and they are well enough positioned totake advantage of opportunities when times are good.”And it is these businesses which are coming up for renewal, and not only in theUS. Ryan states, “In South Africa there are about six-million people who are overthe age of 60. A percentage of those people are business owners and a percentage ofthe children of those business owners will want to pursue other careers. But whatif in that community there is a young industrious person who says to themselves,I could add operational efficiency through tech and upgrading of customer serviceto it and eek out higher margins and a better return. All of a sudden it becomes aninteresting opportunity for older business owners to sell out, get the cash that theyneed, and you’ve got new young blood in the business.”The younger owners bring the “ingenuity that comes with youth and energy”,together with ambition. Ryan relishes the story of the owners of a small tuckshopin Mamelodi who approached Merchant Capital for a small loan about ten yearsago. As Ryan reports, “The last advance we gave him was about R750 000 and heruns a liquor store, a bar and a restaurant. Now he is building accommodation!”Stories like that inspire Ryan. As he says, “This ingenuity is such a powerful thingbut if you don’t have the working capital and the know-how as to where to get it, youare left sitting with this genius that is just nascent and stuck. Being able to unlockthat is why I get out of bed.”The bigger picture includes the role of SMEs in the broader economy,“the lifeblood of the economy”, as Ryan describes it. He states, “If we are to havea successful and active SME layer to the country, the economy can thrive, newbusinesses will open, more people will be employed, and we need that badly.We wake up every day to serve the entrepreneur and anything that we can doat Merchant Capital to help this sector for the greater good of themselves,potential staff and the economy that’s what we want to do.”Scaling up a butchery to become a Shisanyama, a venue for barbecuing meat, or creating afully-fledged restaurant are options for new owners taking on an established business.PHOTO: SA Tourism/Flickr | PHOTO: 5M2TProviding what communities need is a good basis for a solid business.32 33SMESME FUNDINGFUNDINGMining and ecotourism are promising economic sectors.REPUBLIC OF MADAGASCARREPUBLIC OF MADAGASCARCOUNTRYCOUNTRY PROFILEPROFILEPHOTO: iAko Randrianarivelo on Unsplash | MAP: WikipediaLarge offshore gas fields could transform the economy.REPUBLIC OF MOZAMBIQUEREPUBLIC OF MOZAMBIQUEPHOTO: Eni | MAP: Wikipedia4140Capital: Antananarivo.Other towns/cities: Toamasina, Antsirabe, Mahajanga.Population: 28.8-million.GDP: -billion.GDP per capita: 8.Currency: Ariary.Regional Economic Community: African Union (AU), Southern AfricanDevelopment Community (SADC), Organisation Internationale de laFrancophonie.Landmass: Area: 587 041km².Coastline: 6 000km.Resources: Ilmenite (titanium ore), bauxite, graphite, copper, cobalt, chromite,coal, rare-earth elements, salt, quartz, tar sands, semi-precious stones (sapphires),mica, hydropower. Vanilla, cloves, ylang-ylang, coffee, lychees, fish, shrimp.Main economic sectors: Agriculture, mining.Other sectors: Fishing, forestry.New sectors for investment: Mining (ilmenite, zircon, nickel), oil, gas, ecotourism.Key projects: A five-year World Bank project aims to improve job opportunitiesthrough transformative action, make growth more inclusive by addressingweaknesses and inequities in public service delivery and create resilience toshocks that can reverse improvements in growth or worsen socioeconomicinequalities. Support for ecotourism and agriculture, paired with greaterinvestments in education, health and private enterprise, are key elements of thestrategy. The Antananarivo-Toamasina toll highway will connect the capital tothe largest seaport.Chief exports: Vanilla, cloves, nickel, garments, cobalt.Top export destinations: US, France, China, Japan, Germany.Top import sources: China, India, France, Oman, South Africa.Main imports: Refined petroleum, rice, fabric, palm oil, cotton fabric.Infrastructure: Most roads are unpaved with paved roads totalling 7 617km in2010. Railways 854km, navigable waterways 432km. Main port at Toamasina andother ports at Antsiranana in the north and Taolagnaro in the south. The port ofEhoala will revert to the state once Rio Tinto has completed its mining project.Ivato International Airport is the main hub for Madagascar Airlines and is locatednear the capital.ICT Development Index: 26.4 (2023) ITU.Mobile subscriptions per 100 inhabitants: 70 (2022) World Bank.Internet percentage of population: 21 (2022) World Bank.Climate: Three distinct regions have different characteristics: tropical along thecoast, temperate inland and arid in the south. The country is subject to tropicalcyclones. Because of its isolation, Madagascar is home to many unique speciesof wildlife. There are a number of smaller islands other than the main landmass,including Iles aux Nattes to the south, pictured.Religion: Mostly Christian, including Catholic (34%), also traditional faiths andsmall Muslim following.Modern history: Madagascar was one of the last places to be settled byhumans. Arab traders used it as a hub before French and Portuguese tradingposts were established. With British missionaries present on the island, QueenRanavalona I responded by banning Christianity and banishing foreigners.France invaded in 1883 and gained northern parts of the island. In 1895French forces compelled Queen Ranavalona III to surrender and the royalfamily went into exile. During World War II, Madagascar was ruled by VichyFrance, sympathetic to Germany. As a result, the UK captured the island todeny its use by Japanese ships. The 1947-49 Malagasy Uprising was violentlysuppressed by the French, who had resumed control. Independence wasachieved in 1960. A military council took over in 1972 and from 1975, DidierRatsiraka ruled as president of the Supreme Revolutionary Council. In 1992,a democratic constitution was introduced. A coup in 2009 was followed byan election that ended with the legislature and the executive at loggerheads.Andry Rajoelina won the 2018 presidential election and started his third termin 2023, having won a disputed election that was boycotted by most politicalparties. Malagasy and French are the official languages.COUNTRYCOUNTRY PROFILEPROFILECapital: Maputo.Other towns/cities: Matolo, Nampula, Beira.Population: 34.7-million.GDP: .6-billion.GDP per capita: 8.Currency: Metical.Regional Economic Community: Commonwealth of Nations, Organisationof Islamic Cooperation, Community of Portuguese Language Countries,Non-Aligned Movement, Southern African Development Community, andis an observer at La Francophonie.Landmass: 801 537km².Coastline: 2 700km.Resources: Coal, titanium, natural gas, hydropower, tantalum, graphite.Main economic sectors: Fishing, agriculture (72% of employment), food andbeverages, aluminium, oil and gas, chemical manufacturing.Other sectors: Tourism, services.New sectors for investment: liquefied natural gas (LNG) production at the CoralSouth offshore facility, which has led to investment in sophisticated equipment,pictured. Vast offshore reserves of natural gas found in the Rovuma Basin off thenorthern coast. More than 1 000 mostly small state-owned enterprises have beenprivatised and there are plans to privatise more.Key projects: The Mozambique Country Climate and Development Report ofthe World Bank emphasises the importance of mainstreaming climate actioninto Mozambique’s planning, given the country’s vulnerability to the effects ofclimate change.Chief exports: Coal, aluminium, coke, natural gas, gold.Top export destinations: India, South Africa, South Korea, Italy, China.Top import sources: South Africa, South Korea, China, India, DemocraticRepublic of the Congo.Main imports: Ships, refined petroleum, iron alloys, chromium ore, refined copper.Infrastructure: Most of the 30 000km road network is unpaved and driving ison the left, in line with the former British colonies (and fellow members of theCommonwealth) that surround the country. Maputo International Airport receivesflights from 10 airlines and is the hub for national Mozambican airline, LAMMozambique. There are a further 21 paved airports and more than 100 airstrips.There are 3 750km of navigable inland waterways. The three deapsea ports haverail links to inland and neighbouring countries. The Port of Maputo has links withSouth Africa and Zimbabwe while the ports of Beira and Ncala connect to Malawi,Zimbabwe and Zambia.Mobile subscriptions per 100 inhabitants: 42 (2022) World Bank.Internet percentage of population: 21 (2022) World Bank.ICT Development Index: 25.8 2023 (ITU).Climate: Tropical and subtropical. October to March is the wet season with heavyrain along the coast and less rain in the interior. Cyclones are also common in thewet season and several have caused great damage in recent years.Religion: Roman Catholic and Muslim have the two largest groups of adherentswith Zionist Christians and Evangelical/Pentecostal both accounting for a further15% each.Modern history: The defining feature of modern Mozambican history is the legacyof the 16-year civil war that ended in 1992. Having achieved independence fromPortugal in 1975 two groups, Frelimo and Renamo, engaged in fierce fighting.Frelimo won elections held in 1994 but violence flared up again in 2013. Peace wasbrokered in 2019 but by then an Islamist insurgency had flared up in the northernprovince of Cabo Delgado which has put investment by international oil and gascompanies at risk. A presidential election, held in October 2024, was hotly disputedafter Frelimo’s candidate, Daniel Chapo, claimed a strong victory. Supporters ofVenâncio Mondlane, the candidate who was reported to have received 20% of thevote, did not accept the result and months of protest resulted. Mondlane returnedto the country after a brief exile to further protests and strong police reaction. It ishoped the some form of mediation can occur in 2025.PHOTO: Sky Pixels/Wikimedia CommonsPHOTO: Mondi1716SRisks to infrastructure from climate change are among the more detailed reportingrequirements that African businesses now face, writes Philippa Burmeister, ConsultingPartner and Principal Environmental Scientist at SRK Consulting.ESG DISCLOSURE DEMANDS ARE ONTHE INCREASE IN AFRICASustainability-related disclosure is evolving rapidly across Africa, driven byincreasing awareness of environmental, social and governance (ESG) issues andthe need for greater transparency and accountability in business practices.The Johannesburg Stock Exchange (JSE) has been a leader in this field onthe continent, aligning with stock exchanges in Europe and North America byrequiring listed companies to produce integrated reports that include sustainabilityinformation. The African Securities Exchanges Association (ASEA) is also behindthis important agenda and is working towards harmonising sustainability reportingstandards across member exchanges, promoting best practices and consistency inESG disclosures.Similarly, the African Development Bank (AfDB) is actively promoting sustainabledevelopment and encouraging companies to adopt ESG reporting through variousinitiatives and funding programmes. Most disclosure practices in Africa are beingshaped by international organisations and requirements such as the Global ReportingInitiative (GRI), the Sustainability Accounting Standards Board (SASB) and the TaskForce on Climate-related Financial Disclosures (TCFD).International lenders, responsible for much of the funding for projects withinAfrica, also require assessment and reporting in terms of the TCFD as part of theirinvestment decision-making. While the TCFD has completed its mandate and hasbeen dissolved, the Financial Services Board (FSB) has requested the InternationalFinancial Reporting Standards (IFRS) Foundation to assume responsibility foroverseeing companies’ progress with climate-related disclosures.The IFRS released the IFRS S2 Sustainability Disclosure Standard in June 2023,which guides climate-related disclosures, and this has been issued by the InternationalSustainability Standards Board (ISSB). The standard requires entities to discloseinformation about their climate-related risks and opportunities.The requirements of the IFRS S2 Standard are consistent with the TCFDRecommended Disclosure, but go further. While the TCFD provides a flexible,voluntary framework specifically focused on climate-related risks and opportunities,the IFRS S2 is part of a broader sustainability reporting framework with more detailedand integrated requirements.These two standards require reporting of both transitional and physicalclimate risks. Climate-related transitional risks refer to risks that companies faceas a result of the transition to a lower-carbon economy. Climate-related physicalrisks, on the other hand, refer to the risk of climatic changes on infrastructureand operations.Risks associated with climate change now form part of more sophisticated ESG reporting requirements.ESGESG REPORTINGREPORTINGComplex disclosureThis evolution of more complex and in-depth disclosure requirements – and theneed for assessment as part of investment decision-making – has demanded thedevelopment of specialised expertise in the consulting space. This includes servicesto address both climate transitional and physical risks. For transitional risks, clientsneed access to skills such as greenhouse-gas quantification and transitional-riskassessment. Consulting teams of mining engineers are also developing skills indecarbonisation, so that engineers can draw on their mine-design experience toidentify and design options that are suitable for specific sites.On the climate-physical risk side, skills are required in climate-change projection,preferably incorporating a range of different disciplines and with independent peerreview. These new demands are leading to the development and advancement ofspecialised tools. These tools will be used to create long-term meteorological datasetsand downscale climate-change projections to ensure they are site specific and therisks identified are applicable to the site being assessed. These tools will be critical inthe identification of potential physical risks and inform measures required to adaptto the changes.It is clear that Africa is not being left behind in the global drive for more detailedsustainability reporting. Fortunately, the mining sector has access to considerablelocal experience and expertise which both benchmarks against and contributes toglobal best practice.Climate-change projection is becoming increasingly important, allowing for long-term meteorological datasets and predictions that are specific to a particular site.Philippa Burmeister, partner and principal environmental scientistABOUT THE AUTHORPhilippa Burmeister, an expert in integrated environmental managementwith over 20 years of experience, specialises in air-quality and climate-changeadaptation. Dedicated to innovation and strategic planning, she has developedeffective strategies for addressing climate change, environmental managementand sustainability.ABOUT SRK CONSULTINGSRK Consulting is an independent, global network of over 45 consulting practiceson six continents. Its experienced engineers and scientists work with clients inmulti-disciplinary teams to deliver integrated, sustainable technical solutionsacross a range of sectors – mining, water, environment, infrastructure and energy.For more information, visit www.srk.co.zaSchneider Electric has launched a training lab in Malawi. Officially launched at the Don Bosco Youth Technical Institute facilities in Lilongwe,the Schneider Electric Lab is a modern electrical-installation laboratory, aimed at providing practical training for those pursuing careersin the electrical industry. The Technical, Entrepreneurial and Vocational Education and Training Authority (TEVETA) in Malawi and the DonBosco Youth Technical Institute are the other partners.The lab is equipped with professional Schneider Electric equipment, providing students with the tools and training required to meetglobal standards in the electrical industry. These include industrial wiring solutions and industrial automation solutions. The equipmentwhich students will have access to includes: 24V PLC programming and simulation desktop trainers, three-phase variable speed/frequency drive-training panels, combination of motor-starter-trainer kits and various types of motors. The Schneider Electric Lab formspart of Schneider Electric’s broader commitment to empowering the next generation through education, as outlined in its SchneiderSustainability Impact (SSI) programme that aligns with the UN Sustainable Development Goals (SDGs), aiming to train and empower onemillionpeople by 2025.LABORATORY FOR ELECTRICIANSThe last leg of the fibre route of Paratus Botswana was completed in 2024, bringing to fruition the new Botswana Kalahari Fibre (BKF) route. A total of 840km of fibre waslaid between the Namibian border and Lobatse. The route represents an investment of approximately BWP70-million in Botswana and is the largest significant investment inits own infrastructure by Paratus Botswana to date. The BKF completes the last leg of the Paratus-built Trans Kalahari Fibre (TKF) route, which runs from Johannesburg toSwakopmund in Namibia. The new route creates the lowest latency primary transit path through Botswana and Namibia to Europe. The new BKF will connect Botswana andneighbouring countries to various international subsea cables and to the rest of the world. Paratus Botswana and Paratus Namibia have worked closely together in the bidto connect South Africa to the Equiano cable in Swakopmund. According to Africa Practice and Genesis Analytics, commissioned by Google, Equiano is forecast to more thandouble Internet speeds and increase internet penetration by 7.5% in the next three years. Paratus also announced the launch of its Gaborone metro-fibre ring in 2024.TRANS KALAHARI FIBRE ROUTE COMPLETEDNEWSNEWSKPMG has been publishing a “Global CEO Outlook” for 10 years. In 2024 the first Africa “CEO Outlook Report” came out,carrying the views and insights of the continent’s business leaders.In introducing the publication, Ignatius Sehoole, Africa Chairman and CEO, KPMG in Africa, wrote that, “This year,we place a particular focus on geopolitics, given the recent surge in political tensions over the past year, which hasimpacted the economic side of business. Despite these challenges, the report confirms that African CEOs can unlockopportunities through effective geopolitical risk management, which is crucial for boosting Africa’s economy.”For the first time, KPMG engaged with over 130 CEOs and business leaders across Southern, East and West Africato gain insights into the region’s dynamic business environment. KPMG says its commitment to Africa remains strongas the continent presents numerous growth opportunities in the business environment. Insights from the selectedCEOs highlight both the opportunities and challenges their organisations face. These insights explore important areassuch as how businesses have evolved to navigate the shifting landscape while managing complex economic and geopolitical challenges.In his foreword, Sehoole drew attention to how, “With the evolving workforce dynamics across the African continent, people-related issues remain a key focus for leaders. CEOs haveidentified an interesting link between skills, technology and the reality of ageism, all while navigating a changing environment.”The key findings of the survey were:• CEOs identify technology and generative AI, talent, ESG and geopolitics as the top four risks facing their organisation’s growth prospects• Ethically implementing emerging technologies is a paramount priority• 77% of African CEOs highlight ethical dilemmas as a big challenge within their enterprises• Key investment priorities include governance models and transparency protocols, addressing environmental challenges with a focus on diversity, equity and inclusion.KPMG HAS PUBLISHED AN INAUGURAL “AFRICA CEO OUTLOOK”A strong message was delivered at the CIPS Africa Conference 2024 that economiesand societies across the continent can be transformed through the implementation ofethical and responsible procurement practices.The two-day conference, hosted by the Chartered Institute for Procurement &Supply (CIPS) at Johannesburg’s Houghton Hotel in May, brought together industryleaders from around Africa to discuss how these practices can help nations developand prosper.The example of Rwanda was cited by a conference participant, noting that huge gainshad been made in combating corruption through its zero-tolerance policy and publiceducationcampaigns that promote ethical behaviour.The CIPS Africa Excellence in Procurement and Supply Chain Management Awardsdelivered a wide range of winners in several categories. These included risk mitigation(Safari.com), collaborative teamwork project (DKT International Nigeria), deliveringsocial value through procurement (FNB), public-sector transformation programme(Transnet), sustainability (Equity Bank Limited), digital technology (Rohloff Group),people-development programme (Rand Water), public procurement (Sentech) and theprocurement team of the year (large organisation) was Builders.PROCUREMENT AS A VEHICLE FOR CHANGE© 2024 KPMG Services Proprietary Limited, a South African company with registration number 1999/012876/07 and a member firm of the KPMG global organizationof independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.AfricaCEOOutlookReport2024More than 130 CEOs in Africa sharetheir views on geopolitics, return-tooffice,ESG and generative AI.Recent investments, expansions and milestones.NEWS FROM ALL AROUND AFRICANEWS FROM ALL AROUND AFRICAThe Africa Finance Corporation (AFC) and the Japan Institute for Overseas Investment (JOI) have signed a Memorandum of Understanding(MOU) to drive transformative projects that will accelerate Africa’s energy transition and enhance economic sustainability. AFC is one ofthe continent’s leading infrastructure solutions providers and JOI is an initiative of the Japan Bank for International Cooperation (JBIC).This is one of several programmes designed to facilitate capital flows through insights, risk-mitigating solutions and access to finance. AsKenichiro Hayashi, President of JOI, explained, “Together with AFC, we will provide Japanese companies with the necessary information.”AFC’s presence in the Japanese capital markets continues to grow. In 2022, AFC secured a 9-million dual-currency Samurai termloanfacility, which attracted strong interest from Japanese investors, including Mizuho Bank, MUFG Bank and Sumitomo Mitsui BankingCorporation. In 2019, AFC launched its first Samurai loan facility, raising 3-million and ¥1-billion.SCALING INVESTMENT IN AFRICA98AThese disruptions not only threaten the livelihoods of farmers but also ourglobal food supply. We’re witnessing first-hand how climate change is reshapingagriculture and we must recognise this challenge if we want to forge a path forward.Agriculture is the foundation of our survival; by nurturing the land, we nurtureour future.What is meant by climate-smart agriculture? Climate-smart agriculture (CSA)refers to a strategy for managing landscapes to address the challenges of climatechange and food security. CSA aims to increase productivity, enhance resilienceand reduce emissions of farming practices. Therefore, mitigation and adaptationpractices underpin the achievement of these goals.Mitigation strategiesFirstly, mitigation refers to the ways we reduce, avoid or sequester greenhouse gasesthrough various practices. Some examples are:Regenerative agriculture is an approach that emphasises diversified farmingsystems, moving away from conventional farming. By integrating crops andlivestock, farmers can reduce emissions while enhancing biodiversity. Imagine afarm where crops and livestock coexist, creating a balanced ecosystem that benefits.The solution is to adopt a fresh perspective on how we cultivate our land.Soil health is another key strategy. Practices like cover cropping, agroforestry andno-till farming not only protect the soil but also sequester carbon, transformingit into a natural carbon sink. Healthy soil is essential for resilient crops and it’s awin-win for both farmers and the environment.Precision agriculture is also revolutionising the way we farm. By usingtechnology to optimise resources – such as using water and fertilisers moreeffectively – farmers can reduce waste and enhance productivity. This notonly decreases emissions but also leads to more efficient use of our preciousresources. This reduces input costs and creates more sustainable profits overthe longer term.Renewable energy sources are being harnessed by many farmers. Imagine afarm powered entirely by the sun, not only reducing reliance on fossil fuels butalso cutting energy costs. This can be taken further by linking that solar system toirrigation systems to effectively use water resources. This shift to renewable energycan play a crucial role in making agriculture more sustainable.Additional mitigation strategies: energy-efficient equipment (no-tillageimplements, fuel efficient or electric tractors), reduction of food loss and waste,hydro-power, improved feeding practices for livestock, biodigesters, hydroponics,crop rotation or recycling.A practical example is investing in waste-to-energy solutions on a dairy farm,such as a biodigester, which converts animal manure into energy while producingfertiliser as a by-product. By adopting this practice, the farmer not only promotesa circular-economy approach but also mitigates emissions and disposes of wasteby transforming it into a valuable resource.As climate-smart agriculture practices sequester soil-organic carbon, it presentsan opportunity to earn carbon credits and to incentivise those fostering theCULTIVATING RESILIENCE: AGRICULTURE’S ROLE INCULTIVATING RESILIENCE: AGRICULTURE’S ROLE INCLIMATE-CHANGE MITIGATION AND ADAPTATIONCLIMATE-CHANGE MITIGATION AND ADAPTATIONAdaptation of a speech given by Dr Andrea Campher, Senior Manager Sustainability and Agribusiness atStandard Bank, to the Standard Bank/Business Day Climate Smart Agriculture Seminar, November 2024.PHOTO: Leiliane Dutra on PexelsAccording to the Food and Agriculture Organisation, climate change couldreduce global agricultural productivity by up to 30% by 2050. This is in thecontext of needing to feed nearly 10-billion people by then.I’ll never forget growing up in a small farm town where we would pray for rainin church on Sundays. Drought has been a harsh reality for my community, oneof many small towns struggling to thrive economically. Fields that once flourishedhave turned to dust, leaving farmers to watch helplessly as their crops wither underthe relentless sun. It is said that if the farmer struggles, the farmworker struggles.Then the local business and the local school, leaving a ripple effect on our ruraleconomies. This personal story is not just an anecdote; it’s a reality for many.This presentation illustrates that agriculture is both a contributor to greenhousegasemissions and a powerful ally in mitigating and adapting to climate change.Let’s start by understanding the challenges we face. Climate change is not adistant threat; it’s here, impacting agriculture in profound ways. The Africancontinent warmed at a rate of +0.3°C/decade between 1991 and 2023, a slightlyfaster rate than the global average.Over 60-million people were affected globally by the 2023/24 El Niño, whichbrought extreme weather events such as droughts, heatwaves and floods. Vulnerableregions like Southern Africa and the Horn of Africa were hit hardest, worseningfood insecurity in areas already under strain – this is while agricultural demandin Africa will need to be increased by approximately 80% by 2050. It is estimatedthat African governments spent US.2-billion managing weather-related naturaldisasters in 2023. But the cost to the farmer individually was much higher.environment. Various solutions through waste-to-energy, biochar, soil-organiccarbon and agroforestry can earn farmers additional income. The key lies inreimagining our approach to agriculture.Adaptation strategiesAlongside mitigation, we must focus on adaptation strategies. Adaptationinvolves adjusting agricultural practices and systems to cope with theimpacts of climate change, ensuring resilience and sustainability in the faceof changing conditions.Resilient crop varieties: Crops that can withstand extreme weather conditionssuch as drought-resistant or flood-tolerant varieties can significantly bolster foodsecurity in vulnerable regions.Water management: Innovative techniques like drip irrigation and rainwaterharvesting improve efficiency and make farms more resilient to water scarcity. Byadopting these practices, farmers can ensure they’re using water wisely, even intimes of drought.Other adaptation practices include agricultural insurance, weather forecasting,sustainable water-storage solutions or integrated pest management. Climate-smartdecision-making underpins the success of implementing these practices.A practical example is investing in practices that safeguard crops againstdrought by implementing soil moisture conservation techniques, such asmulching and cover cropping. These methods enhance water retention andimprove soil health. Furthermore, there is scope to investigate new technologiesthat improve water efficiencies in drier seasons or improve draining systemsfor waterlogged field crops.Standard Bank’s Climate-Smart Agriculture Strategy supports the threeprongedapproach through decarbonisation solutions such as smart water, energy,equipment and practices in building resilience and promoting low emissions whilewe need to ensure farmers stay profitable.The World Meteorological Organization estimates that the cost of adaptationis -billion to -billion annually over the next decade for governments, butwhat will this cost for the farmer who is struggling to access finance – his land, hisinheritance, his assets, his hard-won labour?Innovation is the key to unlocking the potential of our challenges; let’s innovateour way out of crisis.Call to actionWe all have a role in supporting sustainable agricultural practices, whether throughadvocacy, investing, making informed consumer choices or engaging in ourcommunities. Each of us can contribute to this vital cause.We stand at a pivotal moment in the fight against climate change. We have achoice: to adapt and thrive or to ignore the signs and face dire consequences. Byembracing mitigation strategies that reduce emissions and investing in adaptationpractices that enhance resilience, we can transform agriculture into a cornerstoneof climate solutions.Imagine a future where agriculture not only feeds the world but also serves as arobust buffer against climate change.Together, let’s cultivate a future where our farms are not just sources ofsustenance but powerful allies in the battle for a sustainable planet. The time foraction is now – let’s rise to the challenge and grow a sustainable tomorrow!PHOTO: Erwan Hesry on Unsplash | PHOTO: Wynand Uys on Unsplash2524SUSTAINABLESUSTAINABLE AGRICULTUREAGRICULTURE4
DRIVING CHANGE:HOW THE DBSA ISTRANSFORMINGAFRICA THROUGHINFRASTRUCTUREDEVELOPMENTAmid the rapid changes and challenges facing the world today,infrastructure development emerges as a vital pillar of economicstability and sustainable growth.The Development Bank of Southern Africa (DBSA) plays apivotal role in transforming the African development landscapeby addressing critical gaps in energy, transportation, water, andICT infrastructure.As one of Africa’s leading development finance institutions, theDBSA is more than a financier; it is a catalyst for sustainablechange. By fostering regional integration and enabling accessto essential services, the Bank drives forward its mission ofbuilding a prosperous, inclusive continent.SHAPING AFRICA’S INFRASTRUCTURE FOR TODAY ANDTOMORROWThe DBSA leads infrastructure projects designed to tackleAfrica’s most urgent challenges. Its investments in renewableenergy contribute significantly to the Just Energy TransitionPlan (JETP), reducing carbon emissions and expanding energyaccess. By prioritising projects that empower communities, buildresilience, and address inequalities, the DBSA ensures thatdevelopment benefits reach those who need them most.In the transport and logistics sector, the DBSA supportsinitiatives that connect African markets and communities,fostering trade, and economic cooperation. These projectsgenerate jobs, enhance cross-border trade, and position Africaas a competitive player in the global economy. Similarly, theBank’s investments in water and sanitation infrastructureimprove the quality of life for millions while addressing criticalhealth and environmental challenges.THE DBSA’S UNIQUE ROLE IN AFRICA’S DEVELOPMENTAfrica’s infrastructure deficit presents a daunting challenge,requiring innovative approaches and significant investment.The DBSA plays a vital role in closing this gap by mobilisingresources, de-risking investments, and crowding in private sectorcapital. Its expertise ensures that projects are both viable andsustainable, delivering tangible impacts across the continent.What truly sets the DBSA apart is its ability to foster partnershipsthat amplify its impact. By collaborating with governments,private investors, and multilateral organisations, the Bankstructures financing solutions that unlock stalled projects andturn transformative ideas into reality. This collaborative approachnot only strengthens regional development but also positionsAfrica as a destination for sustainable investment.BUILDING GLOBAL PARTNERSHIPS FOR AFRICANDEVELOPMENTThe DBSA actively engages with international partners to advanceAfrica’s development priorities. Through its co-hosting of the Financein Common Summit (FiCS 2025) alongside the Asian InfrastructureInvestment Bank (AIIB) and in partnership with the Agence Françaisede Développement (AFD), the DBSA demonstrates the importance ofglobal collaboration in addressing infrastructure challenges.AIIB, renowned for financing sustainable infrastructure acrossAsia and beyond, brings valuable expertise in green financingand innovative solutions that align with Africa’s needs. Meanwhile,AFD, with its long-standing commitment to climate-resilient projectsin Africa, complements the DBSA’s focus on transformativeinfrastructure. Together, these institutions exemplify howpartnerships can accelerate progress and unlock opportunities forsustainable development.DRIVING INCLUSIVE GROWTH THROUGH INNOVATIONThe DBSA champions infrastructure that addresses Africa’simmediate needs while preparing the continent for futurechallenges. Its investments create systems that enablecommunities to thrive and economies to grow. From renewableenergy projects powering homes and businesses to digitalconnectivity initiatives opening new avenues for education andcommerce, the DBSA’s impact is far-reaching.As Africa’s population grows and urbanises, the demand forscalable and sustainable solutions intensifies. The DBSA risesto this challenge with a forward-thinking approach that combinesfinancial expertise, innovative project design, and a deepcommitment to social and environmental responsibility.A VISION FOR SUSTAINABLE DEVELOPMENTThe DBSA’s work goes beyond financing projects; it is about buildinga future where Africa thrives. By focusing on high-impact sectors,fostering partnerships, and championing sustainable development, theDBSA ensures its investments leave a lasting legacy.Through leadership, innovative financing, and unwaveringcommitment, the DBSA is not merely transforming infrastructure, itis laying the foundation for building Africa’s enduring prosperity.
